Sluggish foreign institutional investor (FIIs) inflows and the absence of fresh peace moves pulled down equities for the second straight day today.
The Bombay Stock Exchange sensex settled down 38.96 points to 3,284.54, but off from its intra-day low of 3,282.32 points.
Brokers said foreign funds were still keeping away from the market, suggesting that they were not comfortable yet with the ground situation in the country.
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FIIs were net sellers of Rs 62.5 crore on Monday. Meanwhile, on the National Stock Exchange, the S&P CNX Nifty shed 13.95 points to 1,074.95. Gainers outnumbered losers in brisk trade.
Despite an overnight rally on the Nasdaq, most technology stocks remained weak as investors continued to remain uncertain about a turnaround in the fortunes of technology stocks. Technology bellwether Satyam Computer slipped 3.64 per cent to Rs 226.30 on fund-based selling.
Other key stocks such as Infosys Technologies (down 2.77 per cent to Rs 3,281.30) and HCL Tech (down 2.14 per cent to Rs 213.10) ended lower after opening firm.
Media major Zee Telefilms came off the day's high of Rs 144 to Rs 136.75, before settling at Rs 137.20, down 3.04 per cent from its Monday's close.
Frontline technology stocks such as Wipro (down 3.68 per cent to Rs 1,517.10), Hughes Soft (down 2.80 per cent to Rs 220.05), Mascot Systems (down 1.82 per cent to Rs 226.55), Polaris Soft (down 1.54 per cent to Rs 255.55) and NIIT (down 0.73 per cent to Rs 256.85) fell on selling pressure.
Most bluechip old economy stocks also remained weak. FMCG giant Hindustan Lever settled down 0.95 per cent to Rs 192.65 on selling pressure from domestic mutual funds. Other heavyweights such as Reliance Industries (down 0.77 per cent to Rs 283), State Bank of India (down 0.10 per cent to Rs 246.65) and ITC (down 0.06 per cent to Rs 623.60) on lack of fresh buying.
Cipla came off sharply from Rs 1,000 to Rs 940 towards the close of the session, before settling at Rs 947.40, down 4.84 per cent from its Monday's close.
Meanwhile, Ranbaxy Laboratories (up 2.15 per cent to Rs 885.65) remained firm in an otherwise subdued market, recovering from the day's low of Rs 855.15 on selective institutional buying interest.
Other bluechip stocks such as Grasim (up 0.43 per cent to Rs 317.70), Nestle India (up 0.40 per cent to Rs 514.20) and Hindalco (up 0.18 per cent to Rs 716) also ended higher on selective buying interest.